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Text Messaging Boom Raises Senate Concerns

by John Lister on September, 18 2008 at 08:09AM EDT

The number of text messages sent by US phone users has more than doubled in the past year. However, an influential politician is asking questions about suspiciously similar price increases among leading politicians.

The mobile phone trade body CTIA has just reported a record 75 billion text messages were sent during June, up from 28.8 billion in the same month last year. The same survey found 260 million people use some form of wireless communications device. That certainly raises questions as it would mean an average of 10 text messages per user per day, which sounds remarkably high.

CTIA also boasts a 40% rise in revenues from data service -- that is, anything other than voice calls. For the first six months of this year, firms took in $14.8 billion. (Source: ctia.org)

The timing of that particular announcement might wind up hurting the industry. Senator Herb Kohl, who's in charge of the Antitrust Subcommittee, has recently written to the four leading providers, AT&T, Sprint, T-Mobile and Verizon, which control 90% of the market.

He's asking why text message rates have doubled in the past two years, with Sprint making the move first, closely followed by all three rivals. Given that there's been no noted rise in the minimal costs of carrying such services, Kohl suggests the rises are "hardly consistent with the vigorous price competition we hope to see in a competitive marketplace." The carriers have said they'll answer any questions, which could include why text messages are so expensive in comparison to other mobile data services. (Source: informationweek.com)

There is a precedent for such government intervention: European regulators recently announced plans to crack down on firms that were levying exceedingly high prices to send text messages from one country to another, in some cases charging 32 times the actual cost of providing the service.